Why Real Estate Developers Can Benefit From Hard Money Lenders

What most real estate developers need to understand is that financing doesn’t necessarily have to be done under the conventional lending guidelines. Hard money loan can be a great financing alternative since it provides an alternative that is not available when dealing with banks or other traditional lenders.
These loans are issued directly which means that no third party is involved in the agreement. The borrower also enjoys a more flexible arrangement which can lead to more favorable terms.
Here are more reasons why real estate developers should opt for hard money loans.
Faster Approval Rates
The good thing about hard money loans is that you can get pre-approved within one or two days as long as your have provided all the relevant documents. What most hard money lenders need is for the borrower to have an equity of at least 20%, and the asset to have good market value. You can be financed in less than a week which is unlike normal loans that take more than a month.
Credit Risk Isn’t A Concern
LBC Capital LLC or most hard money lenders aren’t focused on arbitrary income requirements or credit score, but are interested in the equity and value of the property. If the borrower fails to repay the loan, the lenders will take the property as collateral. Hard money lenders are investors and have a better understanding on how to evaluate real estate as an investment.
No Pre-Payment Penalties
Most lending financial institutions or banks may subject you to pre-payment penalties if you decide to pay the loan before the maturity date. This is however not the case with hard money lenders. Therefore, if you decide to pay off your loan before the due date, you can do so without worrying about being penalized.